1. FINAL ACCOUNTS OF BANKING COMANIES

2. Sec 5(b) of Banking regulation Act defines banking as “ accepting for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise withdrawable by cheque, draft, order or otherwise

3.  No banking Co shall directly or indirectly deal in the buying, selling or bartering of goods except in connection with the realisation of security given to or held by it  No banking Co can engage in any trade,or buy, sell or barter goods or others otherwise than in connection with bills of exchange received for collection or negotiation or with such of its business specified in sec 6(1)

4.  Interest on loans and overdraft  Discount on bolls discounted  Dividend and interest on its own investment  Profit on overseas exchange transactions  Commission on transfer of funds, issue of bank draft and charges for various service rendered

5.  Interest on deposits  General expenses of management  Maintenance of premises and equipments  Taxation

6.  Non Banking Assets: These are the assets which are not used in the ordinary course of business of banking, but they are such immovable and movable properties which come in the possession of the banking company for recovering the amount due from customers. These will be shown on the asset side of the B/S under the head ‘Other Assets’ Such assets should be disposed within 7 years and the profit or loss on sale will be shown under the sub-head ‘miscellaneous income’ in Schedule 14 ‘Other Income’

7.  Minimum Capital and reserves (Sec 11): In case of banking co Incorporated Outside India, but not having a place of business in the city of Kolkatta or Mumbai, the sum of its paid up capital and reserves shall not be less than Rs. 15 Lakhs, and if it has a place of business in Mumbai or Kolkatta or in both, Rs. 20 lakhs. In the case of Banking Companies incorporated in India the sum of paid up capital and reserves shall not be less than - If it has a place of business in more than one states and Rs. 5 lakhs if such place of business is Mumbai or Kolkatta Rs. 10 lakhs. - If it has all its place of business in one state other than Mumbai or Kolkatta Rs. 1 lakh in case of its principal place of business plus Rs. 10000 for each additional place of business.

8.  Commission, brokerage etc on shares : (sec13) No banking co shall pay commission, brokerage, discount etc exceeding 2.5% of its paid up value.  Dividend: (sec 15) A banking co can not pay dividend until its capitalised expenses like preliminary expenses, share selling commission etc have been completely written off. But can pay dividend without writing off depreciation, bad debt etc, where adequate provision has been made.

9.  Statutory reserve: (Sec 17) banking co incorporated in India shall transfer every year at least 25% 0f its profits before dividend to a statutory reserve until the amount of reserve together with Security Premium Account is equal to the paid up capital.  Cash Reserve: (Sec 18) Banks are required to maintain with RBI a cash reserve of at least 3% of its deposits. At present it is ---%. RBI can raise CRR up to 15%

10.  Statutory Liquidity ratio: banks are required to maintain at least 25% of its time and demand liabilities in the form of liquid assets such as gold etc. SLR may vary between 25% to 40%.  Loans and Advances restrictions: no Banking Co can advance loans on the security of its own shares.

11.  Receiving Cashier’s Counter cash Book  Paying Cashier’s Counter Cash Book  Sectional csh Book  Cash balance Book  Current Accounts ledger  Saving Accounts Ledger  Fixed Deposit Accounts Ledger  Investment Ledger  Loans ledger

12.  Bills Discounted and purchased ledger  Cash credit ledger  Private or profit and loss Ledger The important memorandum books and Registers are  Bill registers and Diaries  Short bills recievable for collection register  Acceptances, registers and diaries  Safe Custody register  Securities reister  Standing Orders book  Specimen Signature register

13.  Posting:entries are posted in the personal ledger directly from slips ie pay in slip, withdrawal slips and cheques. This system is known as slip system. The slips themselves act as loose journal entries.  Daily Trial Balance: TB is prepared every day from the balance of accounts in the general ledger.  Self balancing: personal ledgers are kept under self balancing system  Daily Summary Sheets: the slips posted into different personal ledgers are summarised on daily summary sheets totals of which are posted to the control accounts in the general ledger.

14.  Continuous Check: All entries in the personal ledgers and summary sheets are checked by persons other than those who have recorded entries.  Double Voucher System: Two vouchers are prepared for non cash transactions. They are debit voucher and credit voucher.

15. According to Sec 29, a Banking Co incorporated in india, is required to prepare at theend of each accounting year, a Balance Sheet and profit & Loss A/c in respect of all business transacted by it in the form sets out in the Third Schedule of the Act.

16.  Prepared in Vertical form  ‘Form B’ of Third Schedule of banking regulation Act is used.  Divided into 4 Sections.

17.  1. Income:  First item is interest earned.  Details are shown in Schedule 13  Bad debts and other provisions are not deducted. They are shown as a seperate item.  Second item is Other Income.  The details are shown in schedule 14

18. 3. Profit / loss:  Profit or loss of the current year (difference between 1&2) and profit or loss forwarded from the last year are shown

19.  2. Expendeture:  First item is interest expended.  Details are shown in SCHEDULE 15  Second item is Operating Expenses.  Details are shown in SCHEDULE 16  Third item is Provisions and Contngencies

20. 4. Appropriations: Amounts transferred to statutory Reserve, other reserves, dividend etc are shown. The balance is transferred to balance sheet.

21. Form of Profit & Loss A/C scheduleNo(current year) (Previous year) (1)Income Interest Earned Other Income Total (2) Expenditure Interest Expended Operating Expenses Provisions and Contingencies Total (3) Profit/loss For current year ( 1-2) brought forward from previous year Total (4) Appropriations Transfer to reserves Transfer to proposed dividend Balance carried over to Balance Sheet Total 13 14 15 16------------------------------------------------------------

22. particularsCurrent Year Previous Year 1.Interest on Advances 2.Discount on Bills 3.Interest on balances with RBI and other inter bank Funds 4.Others Total-----------------

23. Particulars Current year Previous year 1.Commission, Exchange and Brokerage 2.Profit on sale of investment less loss on sale of investment 3. Profit on revaluation of investment less loss on revaluation of investment 4. Profit on sale of land, building and other assets less loss on sale of land and other assets 5. Profit on exchange transactions less loss on exchange transactions 6. Income earned by way of dividends etc from subsidiaries/ companies or joint ventures abroad / in India 7. Miscellaneous income Total------------------

24. particularsCurrent year Previous Year 1.Interest on Deposits 2. Interest on RBI borrowings/ inter bank borrowings 3. Others Total-------------------

25. particularsCurrent yearPrevious year 1.Payment to and provision for employees 2.Rent, taxes and lightings 3.Printing and stationary 4.Advertisement and publicity 5.Depreciation on banks property 6.Director’s fees, allowances and expenses 7.Auditors fees and expenses 8.Law charges 9.Postage, telegram, telephones etc 10.Repairs and maintenance 11.Insurance 12.Other Expenses Total----------------------

26. particularsSchedule No Current Year Previous year Capital & liabilities Capital Reserves & Surplus Deposit Borrowing Other liabilities Total Assets Cash and Balance with RBI Balances with Banks & Money at Call & Short notice Investments Advances Fixed Assets Other Assets Total Contingent Liabilities Bills for Collection 1 2 3 4 5 6 7 8 9 10 11 12------------------------------

27. ParticularsCurrent year Previous year 1.For Nationalised banks capital (fully owned by central Govt) 2. For banks incorporated outside India capital (the amt brought by banks as start up capital as prescribed by RBI) Amount of deposit kept with RBI u/s1(2)of the Act Total 3. For other banks Autherised capital (---shares of Rs --- each) issued Capital (---shares of Rs --- each) Subscribed capital (---shares of Rs --- each) Called up Capital (---shares of Rs----each) less calls unpaid Add forfeited shares Total --------- -----------------------------

28. ParticularsCurrent year Previous year 1.Statutory Reserves Opening balance Additions during the year Deductions during the year 2. Capital reserves Opening balance Additions during the year Deductions during the year 3. Share premium Opening balance Additions during the year Deductions during the year 4. Revenue and Other reserves Opening balance Additions during the year Deductions during the year 5. Balance in profit & loss A/C Total -------------------

29. ParticularsCurrent year Previous year A.1. Demand Deposits (i) From banks (ii) from Others 2. Savings bank Deposits 3. term Deposits (i) From banks (ii) from Others Total B. 1. Deposits of Branches in India 2. Deposits of Branches outside India Total-------------------

30. ParticularsCurrent year Previous year A. Borrowings in India 1. Reserve Bank of India 2. other banks 3. Other Institutions and Agencies B.Borrowings Outside India total-------------------

31. ParticularsCurrent year Previous year 1.Bills payable 2. Inter Office Adjustments (Net) 3. Interest Accrued 4. Others (including provisions) total-------------------

32. ParticularsCurrent year Previous year 1.Cash in hand (including foreign currency notes) 2.Balance with RBI (i) In current account (ii) In other accounts Total-------------------

33. ParticularsCurrent Year Previous Year 1.In India (i) Balances with banks (a) In Current Accounts (b) In other Deposit Accounts (ii) Money at Call and Short Notice (a) With banks (b) With other institutions Total 2. Outside India (i) In Current Accounts (ii) In other Deposit Accounts (iii) Money at Call and Short notice Grand Total-------------------- --------------------

34. ParticularsCurrent Year Previous Year 1.Investments in India (i) Govt Securities (ii) Other approved Securities (iii) Shares (iv) Debentures and Bonds (v) Subsidiaries or joint ventures (vi) Others (to be specified) Total 2. Investment out side India (i) Govt Securities (including local authorities) (ii) Subsidiaries or joint ventures abroad (iii) other investments (to be specified) Total Grand total(1&2)---------- -------------------- ---------- --------------------

35. ParticularsCurrent Year Previous Year 1. (i) Bills Purchased and Discounted (ii) Cash credits, overdrafts and loans repayable on demand (iii) Term loans Total 2. (i) Secured by tangible assets (ii) Covered by bank/ Govt guarantee (iii) Unsecured Total 3. (i) Advances in India (a) priority Sectors (b) public Sector (c) banks (d) Others Total (ii) Advances Outside India (a) Due from banks (b) Due from Others Bills purchased and discounted Syndicated Loans Others Total Grand Total ---------------------------------------- ---------- ------------------------------ ---------- ---------- ----------

36. ParticularsCurrent Year Previous Year 1.Premises At cost on 31 st March of the preceding year Additions during the year Deductions during the year Depreciation to Date 2. Other Fixed Assets (Including Furniture and fixtures) At cost on 31 st March of the preceding year Additions during the year Deductions during the year Depreciation to Date Total ---------- ----------

37. ParticularsCurrent Year Previous Year 1.Inter office Adjustments(net) 2.Interest Accrued 3.Tax paid in advance/ Tax deducted at Source 4.Stationary and Stamps 5.Non Banking Assets Accured in Satisfaction of Claims 6. Others Total ---------- ----------

38. ParticularsCurrent Year Previous Year 1. Claims against the Bank not acknowledged as Debt 1.Liability for partly paid Investments 2.Liability on account of outstanding forward exchange contracts 3.Guarantee given on behalf of constituents (a) in India (b) outside india 5. Acceptance, endorsments and other Obligations 6. Other Items for which the bank is contingently liable Total ---------- ----------